Local industrial systems and the location of FDI in Italy

This article investigates the determinants of foreign direct investment (FDI)location across Italian provinces. Specifically it examines the relationship between industry- specific local industrial systems and the location of inward FDI. This extends previous analysis beyond the mere density of activity, to illustrate the importance of the specific nature of agglomerations in attracting inward investment. The article develops a model of FDI location choice using a unique FDI database stratified by industry and province. The results also suggest that the importance of agglomeration differs between industries, and offers some explanation for this.

The multinational enterprise as a source of international knowledge flows:Direct evidence from Italy

This paper examines the determinants of technology transfer between parent firms and their international affiliates, and of knowledge spillovers from those affiliates to host-country firms. Using a unique data set of foreign multinational enterprise (MNE) affiliates based in Italy, we find that affiliate investment in R&D and investment in capital-embodied technology plays a significant role in determining the nature of intra-firm technology flows. However, the basis for any spillovers arising from MNE affiliates does not originate from codified knowledge associated with R&D, but rather from the productivity of the affiliate.